Unformatted text preview: Valuation or Allocation 5. Obtain a copy of client's final priced inventory and (W-1): (a) Recalculate extensions and footings. (b) Trace totals to trial balance. (c) Trace test counts to client's final priced inventory. (d) Investigate differences between physical counts and perpetual records (S-9; W-1). 6. Obtain a copy of client's final priced inventory and: a) Test prices used to cost inventory by reference to purchase invoices or other source data. Consider treatment of discounts and freight. Use the FIFO cost flow method. b) Using invoices near year-end check current replacement costs to see if inventory prices exceed replacement costs. If so, make lower-of-cost-or-market adjustment. Presentation and Disclosure 7. Determine that the basis of inventory valuation is properly disclosed in the financial statements....
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- Spring '08
- Balance Sheet, Gramophone record, FIFO and LIFO accounting, Trace cutoff data